TIFs

[AriPVD]

There are many reasons to herald TIFs as an innovative tool for urban redevelopment. The idea of a TIF is to spur leveraged investment over the TIF period (usually around 20 years), thus increasing the tax base and increasing revenue available to the city over a longer term. TIFs are a strategic economic growth tool.

With that said, there is fear that TIFs can (and have beeen) abused. Without proper oversight, the benefits of a TIF can go to projects that will not result in a substantially increased tax base over time. In other words, they can go to projects that enrich one person and not the community. These can be considered to fail the "but for" test, as in highest and best use development will still occur "but for" the TIF.

Some detractors say that TIFs are selfish, because they deprive the general fund of new tax revenue by directing the increment of increased revenue to specific projects.

If the COMMON goal is to increase the financial well being of the city and her citizens--to maximize the potential of the tax base to support generous municipal services and programs--how can we get on the same page about TIFs? Can we all agree that they are a useful tool IF they do indeed leverage investment (and thus tax revenue) over the long term? Let's hug it out.

[Frankie811]

I agree with the above, however there are some people who cannot see the forest through the trees. They can't seem to see the big picture. All they seem to know is that another rich developer is getting a big break and the little guy is getting screwed again.

[eltron]

There are many reasons to herald TIFs as an innovative tool for urban redevelopment. The idea of a TIF is to spur leveraged investment over the TIF period (usually around 20 years), thus increasing the tax base and increasing revenue available to the city over a longer term. TIFs are a strategic economic growth tool.

With that said, there is fear that TIFs can (and have beeen) abused. Without proper oversight, the benefits of a TIF can go to projects that will not result in a substantially increased tax base over time. In other words, they can go to projects that enrich one person and not the community. These can be considered to fail the "but for" test, as in highest and best use development will still occur "but for" the TIF.

Some detractors say that TIFs are selfish, because they deprive the general fund of new tax revenue by directing the increment of increased revenue to specific projects.

If the COMMON goal is to increase the financial well being of the city and her citizens--to maximize the potential of the tax base to support generous municipal services and programs--how can we get on the same page about TIFs? Can we all agree that they are a useful tool IF they do indeed leverage investment (and thus tax revenue) over the long term? Let's hug it out.

I'm there. I think the TIF can be a very effective tool for economic development, infrastructure improvement AND (this is a big AND) other civic improvements. IF the TIF includes a sizable investment in public benefits like affordable housing (across the spectrum, not just for very-low income, but middle-income condos, say) and infrastructure improvements in targeted neighborhoods that have traditionally been left behind, THEN the TIF can work, both for the big guy and the little guy.

It needs good oversight, and it needs transparancy.

[jencoleslaw]

TIFs i can embrace (under the right circumstance) but i'm really not comfortable with hugging.

[webbage]

For the ignorant among us, i.e. me, what exactly is a TIF?

Thanks!

[Cotuit]

For the ignorant among us, i.e. me, what exactly is a TIF?

Thanks!

wikipedia

[MikeR]

For the ignorant among us, i.e. me, what exactly is a TIF?

Thanks!

Tax Incremental Financing. In other words, instead of an enterprise simply paying what they owe in taxes, they pay a fixed amount identified as a revenue stream to a community as opposed to property taxation. Ususally a TIF comes into play if a developer builds something that surrounding area of a community can benefit from.

Here's an example: Tiverton has one development in a TIF area:

http://www.thevillagesonmounthopebay.com/

The TIF came into being because this development needed to build an 8-inch sewer line for all the condos/townhouses along the sewer line right of way owned by the town. Tiverton could not afford to build a sewer interceptor big enough to handle the sewerage from the more densely-populated north end of the town (28-inch line), so the developer built the 28-inch line (big enough to handle the sewerage for all of N. Tiverton) by issuing a TIF bond, and in returtn, some the revenue the town would normally receive through property taxation is earmarked for the paying of that bond.

The community can benefit. In Tiverton's case, there were some lots in the north end that were unbuildable because the property could not perk due to poor drainage (could not ger a DEM permit to build a septic system). When the sewer line got built, these lots became buildable because they could tie into the interceptor. Some of these lots now have houses on them and have panoramic water views and are assessed at over $500,000 as opposed to $3000 when they were unbuildable.

You usually don't see the immediate benefits from a TIF, they come a few years down the road. TIF's can hurt the community too, in how they are structured.

[DavidSegal]

You can find a study that shows just about whatever you're looking for -- but I've been given pause by several studies that show that TIFs really just tend to displace development -- concentrating it in TIF districts, and pulling it away from non TIF districts -- rather than increasing development. We can move forward with a TIF in Valley, but if that massive project offsets a chunk of demand and means that less, unsubsidized, residential gets built elsewhere, (seems pretty reasonable to think that this would be one effect) the city ends up losing revenue.

Also, we need to keep in mind that the very same TIF would have substantially different ramifications depending on the city where it's located. DC and NYC, for instance, can concede a development's property taxes, but will still benefit from new sales and income taxes generated by that same project. Here just about all the sales taxes, and all the income taxes, go right to the state.